Scammers Target ACH Transactions


Now even this supposedly safer transaction method is under greater siege.

ACH transactions are often considered safer and more difficult to compromise than paper checks and wire transfers, but that reputation might not last. In 2018, 33% of organizations were subject to ACH debit fraud and 20% to ACH credit fraud, both up several percentage points from 2017, according to an Association for Financial Professionals survey of 600-plus treasury and finance executives.  What’s more, ACH was the only payment method that experienced a year-over-year increase in the percentage of companies that experienced instances of fraud.

“This new development indicates that fraudsters are now trying to use ACH transactions as vehicles for their scams as they move away from checks and wires,” according to the AFP report.  ACH transactions, of course, are increasingly popular and are cheaper than wire transfers.

How are fraudsters stealing ACH funds?  In many instances, “it is usually not the payment method itself that is compromised but the processes leading up to payment initiation,” the AFP explained. Overall payments fraud using account takeovers-in which a scammer illegally gets access to a bank or online e-commerce account-is up, which could also partly explain the increase in ACH frauds, said the AFP.  Most accounting systems only require a routing number and an account number to initiate a payment.

Business email compromise (BEC) schemes that target individuals responsible for payments through social engineering and other methods were the way 33% of respondents said fraudsters accessed ACH credits (a direct payment pushing funds into an account) in 2018, up from 12% in 2017.

What measures are companies taking to combat such fraud? Reconciling accounts daily to identify and return unauthorized ACH debits (a direct payment that pulls funds from an account) was the most commonly used, by 65% of respondents.  About 63% blocked all ACH debits except on a single account set up with ACH debit filter/ACH positive pay, and 37% blocked ACH debit filter/ACH positive pay, and 37% blocked ACH debits on all accounts.

About Accountnet

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